This study aimed to shed light on the molecular and cellular mechanisms responsible for initiation and progression of liver malignancies by examining the role of phosphatase and tensin homolog on chromosome 10 (Pten) in liver tumor progression in miR-122a (Mir122a)–null mice. We generated and monitored liver tumor initiation in Mir122a-null Pten heterozygous (Mir122a−/−;Pten+/− and Mir122a−/−;Alb-Cre;Ptenfx/+) mice and compared the results with those in Mir122a−/− mice. Both Mir122a−/−;Pten+/− and Mir122a−/−;Alb-Cre;Ptenfx/+ mice developed visible liver tumor nodules at 6 months of age. In premalignant livers of Mir122a−/−;Pten+/− mice, decreased PTEN and increased phosphorylated AKT were specifically observed in periportal cells, associated with inflammatory and fibrotic microenvironments. Furthermore, IL-1β and tumor necrosis factor-α levels significantly increased in Mir122a−/−;Pten+/− premalignant livers at 6 months of age. Oval cells expressing A6, epithelial cell adhesion molecule, keratin (K) 8, K19, and SRY (sex determining region Y)-box 9 (SOX9) were present in both Mir122a−/− and Mir122a−/−;Pten+/− livers. Interestingly, a hybrid hepatocyte-like population with intermediate levels of K8, HNF4α and SOX9 was located proximally to the oval cells in Mir122a−/−;Pten+/− livers. Lineage-tracing experiments revealed that these intermediate levels of K8 hepatocyte-like cells may be the cells of origin for Mir122a−/−;Pten+/− liver tumors. These findings suggest that inflammatory microenvironments in the periportal area of Mir122a-null mice may locally cause Pten down-regulation and expand tumor-initiating cells, causing hepatocellular carcinoma.